2013 Annual Ethics Training Presented by Heather LoPresti DHRA Associate General Counsel (571) 372-1988 2013 Annual Ethics Training Presented by Heather

2013 Annual Ethics TrainingPresented by

Heather LoPrestiDHRA Associate General Counsel

(571) 372-1988

DHRA Ethics Officials Designated Agency Ethics Official

Robert S. Taylor, General Counsel (GC) (Acting), DoD

Deputy Designated Agency Ethics OfficialCarolyn Howell, GC, DHRA, (571) 372-1987

Ethics Counselor (Primary) Heather LoPresti, Associate GC, (571) 372-1988

Ethics CounselorsHattie DuBois, Associate GC, (571) 372-1965Mathew Ponzar, Associate GC, (571) 372-1977

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ASK BEFORE YOU ACTThere is no attorney client privilege

between you and the DHRA Ethics Counselor

Reliance on a written opinion from an ethics counselor, after full disclosure by you, will certainly help. However, only the Department of Justice decides who it will, or will not, prosecute for criminal violations.

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Goal of Ethics Training

To assist you in carrying out your duties in an ethical manner and to ensure you are aware of specific ethics laws and regulations.

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ETHICAL CHOICES

Most of us will faithfully discharge the duties of the office we have been honored to serve.

There have been incidents where Federal employees have lost their way and committed ethical violations.

The following are some examples.

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ETHICAL CHOICESGSA’s $823,000 Las Vegas 2010 Conference • Bribery and Kickback investigation

– Private parties in M Resort Spa Casino– Pool side entertainment– Conference support contracts awarded sole source in

violation of procurement regulation

• Martha J. Johnson, GSA Administrator Resigns– Johnson, called the conference a “raucous,

extravagant, arrogant, self-congratulatory event that ultimately belittled federal workers… I will mourn for the rest of my life the loss of my appointment.”

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ETHICAL CHOICESVoorhis v. Dep’t of Homeland Security,

2010 MSPB (May 5, 2010) (misuse of position; use of nonpublic information; lack of candor)

GS-13 removed from federal employment because he conducted unauthorized queries of individuals on an official government computer database, and made unauthorized disclosures

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Presentation Road Map

The Principles of Ethical Conduct, 5 C.F.R. 2635.101

Conflicts of InterestImpartiality in performing official dutiesOutside ActivitiesConferencesOther stuff

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Following is a discussion of the Principles of Ethical Conduct. These principles are things that we all intuitively understand. Public service is an honor, and we all feel good when we serve honorably. 9

Basic Obligation of Public Service

Public Services is a Public Trust

Honor

Integrity

Accountability Selflessness

Patriotism

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Avoid Even an Appearance of

Ethical Violations

Put Forth An Honest

Effort In Performing

Your Duties

Do Not Make Unauthorized

Commitments on Behalf

of the Government

Do Not Accept Gifts from

Prohibited Sources Unless

An Exception Applies

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Do Not Solicit Gifts

from Entities

Seeking Official

Action


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o Do not use nonpublic information for private gain

o Do not use your public office for private gain

o Do protect and conserve federal property

o Do act impartially and not give preferential treatment to any private organization or individual

o Do be a good citizen – satisfy in good faith your financial obligations

o Do comply with laws and regulations that provide equal opportunity

o Do disclose fraud, waste, and abuse


Do Not Hold Financial Interests That Conflict With The Conscientious Performance Of Duty.

Do Not Engage In Outside Employment Or Activities, Including Seeking Or Negotiating For Employment, That Conflict With Official Government Duties And Responsibilities.

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Conflicts of Interest18 U.S.C. 208

It is a crime for you to take official action in particular matters, such as contracts, or source selections, where you, your spouse, minor child, general partner, any organization where you serve as an officer, director, trustee, general partner, or employee, or any non-Federal entity with whom you are negotiating employment has a financial interest.

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Examples of conflicts that violate this statute:

1. You serve on a source selection evaluation board when your spouse holds stock in excess of $15,000 in one of the companies offering under a solicitation.

2. You are a contracting officer’s representative (COR), working diligently at your desk, when your contractor calls to offer you a job. You start negotiations without first disqualifying yourself as the COR. 15


Another example of a conflict of interest that would violate 18 U.S.C. 208:

You serve on a source selection evaluation board and one of the offerors employs your spouse. Your spouse will lose her job if you do not award the contract to her company. This is a conflict of interest.

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What if your spouse works for a different division of the company, and there is nothing you can do in your evaluation of proposals that would affect her financial interests? She will not lose her job, promotion, perks, and does not participate in profit sharing. Is this still a conflict of interest?

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ANSWER: No!

As your spouse works in a different division and you cannot affect her financial interests through your participation on the evaluation board, this is not a conflict of interest under 18 U.S.C. 208.

However, you should discuss with your supervisor and OGC whether your participation will nevertheless be a disqualifying financial interest under the impartiality principle as implemented by 5 C.F.R. 2635.502

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Resolution of ConflictsDisqualification/RecusalRegulatory ExemptionReassignmentDivestiture (voluntary or required)

Certificate of Divestiture may be available to defer tax consequence from selling conflicting financial interests – You must obtain the certificate before you sell the interest. See OGC!!!

Qualified Trusts (expensive) Individual Waiver (rarely given)Termination (last resort)

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Conflict RemediesRegulatory Exemptions

Stocks/Securities:

De minimis exemption

For publicly traded stocks, as long as you own less than $15k in a participating company (contractors, subcontractors, companies offering under a solicitation), you may participate in the acquisition, contract, or other particular matter.

Remember: You must aggregate the value of stock ownership. The aggregate includes all financial interests in the fund or funds, held by you, your spouse, your minor children, and general partner. For example, if you own $10K of company X stock and your spouse owns $10K of company X stock, you must add the two together, for a value of $20K. In such a case, you would have a conflict of interest.

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Sector Mutual Fund

• Under the ethics rules, a sector mutual fund is a mutual fund that concentrates its investments in an industry, business, single country other than the United States, or bonds of a single State within the United States (e.g., Aim China, Aim Technology Fund).

• How do you recognize a sector fund?– Fund name usually includes clues about its concentration (e.g., Aim

Energy Fund or Fidelity Advisor Biotechnology).– Look at the Investment Strategy in the prospectus of the fund. Does

the strategy state that it will concentrate in one sector? If so, it is probably a sector fund.

– When in doubt, seek ethics advice.

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Sector Mutual Funds:

De minimis Exemption: The aggregate market value of your interests in the sector fund or funds, not just the value of a conflicting holding, is less than $50,000.

OR

The affected holding is NOT in the sector of a fund’s concentration.

E.g., if a mutual fund that invests primarily in the health care industry also holds stock in a computer company, you would be permitted to work on assignments potentially affecting the computer company, because it is not within the fund’s sector of concentration, i.e. health care.

Tip: The aggregate includes all financial interests in the fund or funds, held by you, your spouse, your minor children, and general partner.

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Remember: You are responsible for monitoring the value of your financial interests in stocks and sector mutual funds throughout the year to ensure that you remain below the regulatory exemption thresholds.

Additional regulatory exemptions exist for certain private sector employee benefit plans, such as defined benefit plans.

Other regulatory exemptions may also apply.

If you believe you have a conflict of interest, do not participate in the matter, and seek ethics advice immediately. There may be a regulatory exemption or other remedy is available to you.

Impartiality in Performing Official Duties5 C.F.R. 2635.502

Do not participate in a matter likely to affect the financial interest of a member of your household, or

Do not participate in a matter where a person with whom you have a covered relationship is also involved, and

A reasonable person with knowledge of the facts would question your impartiality.

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Impartiality in Performing Official Duties5 C.F.R. 2635.502

Covered Relationships include:

Members of your household Relatives with whom you have a

close personal relationship Persons or organizations in which

you have or seek business, contractual, or other financial relationship

Persons or organizations in which your spouse, parent, or dependent child is serving or seeking to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee

Organizations in which you served as officer, director, agent, contractor, consultant, or employee within last year 25

Do these brothers look impartial? We do not want to see you negotiating across the table from your brother!

A Word About Disqualification

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DoD Supplemental Standards at 5 C.F.R. 3601.105 are more stringent than Office of Government Ethics Regulations.

DoD requires that for disqualifying financial interests, where you have an actual conflict of interest under 18 U.S.C. 208, your disqualification must be in writing!

For disqualifications to ensure impartiality, your disqualification notice must also be in writing!

A Word About Disqualification

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Provide the notice to your supervisor with copy to DHRA OGC. Contact DHRA OGC for sample notices.

Always seek ethics advice regarding conflicts and impartiality problems before you participate to avoid an ethical failure.

Your ethics counselor can assist you in determining whether any regulatory exemptions apply.

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WARNING: Ethics Training Has Been Known To Cause Excessive Sleepiness. Please Feel Free

to Pause For A Brief, Not Excessive, Coffee/Tea, or Stretch Break.

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Outside ActivitiesWhether you decide to be an entertainer, barrista, office worker, or even the tooth fairy in off duty hours, there are ethics laws and regulations that will restrict your outside activities.

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Outside ActivitiesCriminal Statutes That Restrict Outside Activities: 18 U.S.C. 208, Conflicts of Interest 18 U.S.C. 203, Representation 18 U.S.C. 205, Representation 18 U.S.C. 209, Dual Compensation 18 U.S.C. 1905, Disclosure of

Confidential Info

41 U.S.C. 2102, Disclosure of Procurement

Info

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Outside ActivitiesCriminal Statutes That Restrict Outside Activities:

18 U.S.C. 203, Representation Bars employees from seeking or accepting compensation for

representing another before a Federal department, agency, or court in matters where the U.S. is a party or has a substantial interest; or receiving money from anyone else’s representation.

18 U.S.C. 205, Representation Forbids employees from prosecuting or assisting in the

prosecution of claims against the U.S.; or representing another before a Federal department, agency or court in matters where the U.S. is a party or has a substantial interest.

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Outside ActivitiesReceipt of Income by Federal Employee Results in 18 U.S.C. 203 Violation

A former employee of the Department of Transportation was sentenced in the U.S. District Court for receiving unauthorized compensation from a Government contractor for performing Government duties. The employee, in his capacity as a Supervisory Marine Surveyor for the Maritime Administration, accepted compensation from a company for providing representational services in preparing a bid package for a $1 million U.S. Coast Guard contract.

The employee pled guilty to one count of violating 18 U.S.C. 203, and the Government dropped its charge of making false statements to the Government and failure to report the receipt of the unauthorized compensation on his annual financial disclosure form. The employee was sentenced to a one-year probation and ordered to pay a $2,500 fine.

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Outside ActivitiesDeputy Secretary of Commerce Improperly Contacts Official at Department of Veterans Affairs -Violation of 18 U.S.C. 205 The Deputy Secretary of Commerce received from his father in law, the owner of a company doing business ‑ ‑with the Department of Veterans Affairs (VA), a letter complaining of delays experienced by the company in modifying its contract with the VA. The Deputy Secretary referred the letter to his counterpart at the VA on behalf of his father in law, and also contacted the VA by ‑ ‑telephone.

A complaint for civil penalties was filed for a violation of 18 U.S.C. 205. The Deputy Secretary agreed to a civil settlement, including a $5,000 fine.

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Outside ActivitiesCriminal Statutes That Restrict Outside Activities: 18 U.S.C. 209, Dual Compensation

Prohibits employees from receiving any salary or contribution to or supplementation of salary from any source other than the United States as compensation for services as a Government Employee.

Keep this in mind when teaching, speaking, and writing. You cannot be paid by third parties for speaking about matters that relate to your official position. 5 C.F.R. 2635.807

Seek ethics advice, and ensure before releasing information, you have obtained a review from public affairs and security per DoD Instruction 5230.29

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Outside Activities“What Happens in Vegas, Stays in Vegas!”

Information You Cannot Share: 18 U.S.C. 1905, Disclosure of Confidential Info

Prohibits employees from disclosing trade secrets or confidential information. Violations may result in fine, imprisonment of not more than one year, or both, and removal from office.

41 U.S.C. 2102, Disclosure of Procurement Info Prohibits employees from knowingly disclosing contractor bid or

proposal information or source selection information before the award of a Federal agency procurement contract. Violations may result in fine, imprisonment for not more than 5 years, or both.

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Outside ActivitiesSelling State Secrets is NOT an Authorized Outside Activity:

18 U.S.C. 641, penalizes improper use of records

18 U.S.C. 793, penalizes disclosure of certain national defense information

18 U.S.C. 794, penalizes the delivery of defense information to aid a foreign government

50 U.S.C. 783, penalizes improper communication of classified information

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Outside Activities

Jill is considering outside employment during furlough.

Can you help her avoid ethical failure?

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Outside Activities

Jill has a great opportunity to sell cosmetics and sets out to beautify the world! Is there a problem?

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Outside ActivitiesNo!

The cosmetic company she plans to work for does not do business with, seek to do business with, or seek any official action from her DHRA organization. As such, the cosmetic company is not a prohibited source, and there is no conflict of interest.

RULE: An executive branch employee may not engage in outside employment or any other outside activity that conflicts with the employee’s official duties. 18 U.S.C. 208; 5 C.F.R. 2635.802

Public Service Announcement: If this had been a prohibited source, Jill, as a Confidential Financial Disclosure, OGE 450, filer would have been required to seek written approval from her supervisor. 5 C.F.R. 3601.107

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Outside Activities

Jill is so enthusiastic about beautifying the world that she expands her business beyond furlough days and has set up a cosmetic display and makeup application center next to her cubicle.

Oh My… We have a problem…

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Outside Activities Limitation on solicited sales. 5 C.F.R. 3601.106

Jill is prohibited from soliciting to DoD personnel who are junior in rank, grade or position, or to family members of such personnel, on or off duty.

Use of Government property and official time. 5 C.F.R. 2635.704 and 705

Jill cannot use Government property, including office space, equipment, and time for unauthorized purposes.

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Outside Activities

Jill would really like to beautify her boss. She has a lovely cosmetic make over kit valued at $50 that she plans give her boss as a birthday present.

Is Jill about to violate the Standards of Conduct?

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Outside Activities

Yes! Jill may not give her boss a gift valued at $50 for her birthday.

General Rule: Employees may not directly or indirectly give a gift or make a donation toward a gift for an official superior, or solicit a contribution from another employee for a gift to either his own or the other employee’s official superior.

Exceptions: For traditional gift giving occasions, such as a birthday, Jill

may give her boss a gift valued at $10 or less, but no cash.

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Outside Activities

It’s always a good idea to seek ethics advice before engaging in outside activities

Moving on to a topic that has been of great concern within DHRA during the past year:

CONFERENCES!

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CONFERENCES

In a report dated Sept. 2012, Dept. of VA, Inspector General found that VA spent a whopping $6.1M on two conferences in Orlando, FL.

11 VA employees responsible for conference planning improperly accepted gifts from contractors doing business with or seeking to do business with VA

Senior leadership abdicated responsibility to ensure fiscal stewardship Wasteful spending on audiovisual aids, food, beverages Unnecessary site survey trips For more detail: http://www.va.gov/oig/pubs/VAOIG-12-02525-291R.pdf

The New Landscape

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CONFERENCES

New Conference Approval Policies! Source Documents:

Deputy Secretary of Defense Memorandum, “Implementation of Conference Oversight Requirements and Delegation of Conference Approval Authority, September 29, 2012

DCMO Memorandum, “Delegation of Conference Approval Authority,” October 16, 2012

USD(P&R) Memorandum, “Designation of Individuals for Approval Authority of Conferences,” [ on or about January 11, 2013].

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CONFERENCESWhen DHRA or DHRA Component is hosting a conference and the estimated dollar value is:

$0 to $100,000 – DHRA Director must approve $100,001 to $500,000 – USD(P&R) must approve Over $500,000 – Deputy Chief Management Officer (DCMO) must approve

When DHRA or DHRA component employee(s) is attending a non-DoD entity conference and the cost of attendance is: $0 to $20,000 – DHRA Director must approve Over $20,000 – DCMO must approve

EXCEPTION: Even if the dollar value of a DHRA hosted conference is at or below $100,000, approval authority is DCMO if the conference involves a co-sponsorship agreement, a no-cost conference planning contract, or other similar arrangement such as an MOU with a non-federal entity, and/or a request for approval of spousal travel

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CONFERENCESConference Defined at DepSecDef Sept. 29, 2012 Memorandum:

A conference is defined in the Travel Regulations as, “[a] meeting, retreat, seminar, symposium, or event that involves attendee travel. The term ‘conference’ also applies to training activities that are considered to be conferences under 5 C.F.R. 410.404.” DepSecDef Memo explains that this definition is only a starting point. What constitutes a conference is a fact-based determination.

A conference may be disguised under other names:

Conventions Expositions Symposiums Seminars Workshops Exhibitions

A conference may have a registration, fee, published substantive agenda, speakers, or discussion panels.

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CONFERENCES

FISCAL STEWARDSHIP

Ensure appropriate management oversight of the conference planning process;

Perform cost comparisons of the size, scope, and location; Determine if a Government facility is available at a lesser rate; Consider alternatives to a conference, e.g., teleconferencing, consolidating

the event with another event; Maintain written documentation of the alternatives considered and the

selection rationale used; Maintain written documentation, to include at least three quotes, of the

costs of each conference site considered; Use the CAPE tool as required by the December 27, 2010, Secretary of

Defense, “Consideration of Costs in DoD Decision Making” memorandum.

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CONFERENCESLOCATION! LOCATION! LOCATION!

WHS Approves Conference Space in the National Capital Region Consider Direct and Indirect Costs:

Travel and per diem expenses; Rent of room for official business; Costs for audiovisual and other equipment; Computer and telephone access fees; Light refreshments or meals; Printing costs; Registration fees and administrative costs; Ground transportation; and Attendees’ travel time and costs.

Congress scrutinizes Federal participation at conferences. Extreme examples where Congress has criticized include sending 236 employees to Barcelona, Spain and 1,000 employees to Orlando, FL. Also criticized was the frequent use of lavish locales including Palm Springs, Atlantic City, and Las Vegas. Oh my…

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CONFERENCESFOOD (DANGER! DANGER! DANGER!) ALWAYS SEEK LEGAL ADVICE!

General Rule: Appropriations may not be used to purchase food

Never use appropriations to purchase food for routine business meetings

Remember: The contractor cannot do what the Government cannot do. If the Government cannot use its appropriations to purchase food, we cannot have the contractor purchase food under its contract on our behalf

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CONFERENCESFOOD Limited Exception to use appropriations for food at a formal

conference Appropriations for food expenses are only permitted for formal

conferences that are related to the purpose for which an agency was established, or the purpose for which an agency’s appropriation was made.

Is the food purchase necessary?1. The meal or refreshment must be incidental to the meeting;2. Attendance at the meal is necessary for full participation in

the business of the meeting, and;3. Partaking of meals or refreshment elsewhere would require

attendee to be absent from essential formal parts of the conference.

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CONFERENCESMEMENTOS (GIFTS or GIVE AWAYS) General Rule: Appropriated funds may not be used to purchase

promotional items You must have statutory authority to promote a message The purchase of the promotional item must be a “necessary

expense.”

Example:

The GAO found that the General Services Administration (GSA) could not purchase buttons demonstrating GSA’s commitment to an energy alternative program for distribution at GSA displays at conferences. The buttons were not a necessary expense to further GSA programs, as there was no direct connection with, and not essential to, the carrying out of the GSA purposes for which the funds were appropriated. B-192423, 1978 WL 11336 (Comp. Gen. Aug. 21, 1978).

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CONFERENCESMEMENTOS (GIFTS or GIVE AWAYS) SEEK LEGAL ADVICE

Examples where mementos were authorized:

Sexual Assault & Prevention Office (SAPRO) purchase of banners promoting the DoD Safe Helpline. Statutory Authority to promote at Public Law 108-375, sec. 577 Banner deemed a necessary expense, and not excessive

The GAO found that it was a necessary and proper use of funds for the National Park Service to purchase and distribute samples of lava rocks to visitors of the Capulin Mountain National Monument because it was determined to be an effective tool in preserving the monument by discouraging visitors from removing lava rock. B-193769, 1979 WL 13004 (Comp. Gen.).

CONFERENCES

Gifts Involving Travel Expenses, 31 U.S.C. 1353 DoD has authority to accept gifts of travel expenses

(accommodations, airfare, and meals) of its employees when they are performing official duties at meetings, conferences, or similar events, but only under certain circumstances.

Advance approval is required. See GC. Never solicit the gift of free travel Gifts in-kind (i.e. gift giver pays hotel bill directly); You

and DHRA are PROHIBITED from accepting a check from the gift giver - checks go directly to U.S. Treasury

Expenses over $250 must be reported.

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CONFERENCES

SPEAKING ABOUT GIFTS…

Remember the general rule: An employee shall not, directly or indirectly, solicit or accept a gift:(1) From a prohibited source; or(2) Given because of the employee’s official position

Exception:Gifts of $20 or Less: An employee may accept unsolicited gifts having an aggregate market value of $20 or less per source per occasion, provided that the aggregate market value of individual gifts received from any one source shall not exceed $50 in a calendar year.

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CONFERENCES

Here is where the gift rule comes into play during conferences…

Joe receives approval to attend a few conferences:

In February, Joe accepts a promotional item from Company Z, a contractor doing business with Joe’s organization. The value is $19.

In April, Joe accepts another promotional item from Company Z. The value is also $19.

In September, Joe accepts his final promotional item from Company Z. The value is $19.

$19+$19+$19 = $57

Joe violated the ethics rules because he accepted more than $50 from one source, Company Z, in a calendar year.

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CONFERENCES

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Providing Logistical Support To Non-federal Entity (NFE) Sponsored Conferences

DHRA and Components may provide speakers or allow use of DoD facilities and equipment (and DoD employees to operate it) for a NFE event

but not for fundraising or membership drives

when the Component Director makes certain determinations as prescribed in the DoD Joint Ethics Regulation (JER), DoD 5500.07-R, paragraph 3-211.

CONFERENCES

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NO ENDORSEMENTS OF NON-FEDERAL ENTITIES Federal Employees may not:

Endorse the NFE, use or allow an NFE to use, his/her official title, position or DHRA/DoD name in connection with the NFE event (e.g., NFE may not include the DHRA logo on its website, letterhead, promotional materials, etc.) 5 CFR § 2565.702(c) & JER 3-300a(1)

Encourage, pressure or coerce other personnel, especially subordinates, to join, support or otherwise participate in outside organizations. 5 CFR § 2635.702(a)

CONFERENCES

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One Final Word on Conferences

With sequestration and employees on furlough throughout the Government, consider appearances when seeking approval to attend a conference.

Ask yourself whether the conference is really that important to the DoD mission…

OTHER STUFF

Post Government Employment:

In general, the post-Government employment laws at 18 U.S.C. 207 place restrictions on the ability of former Federal personnel to “represent” someone before the Government for some period of time after departure. There are different kinds of “Representation Bans.” Seek ethics advice to learn how the bans will apply to your specific situation.

In addition, the Procurement Integrity Act prohibits certain former Federal personnel from being paid by the awardee of a contract in excess of $10M.

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Seek ethics advice before you start seeking post Government employment to ensure you understand the rules, and implement any applicable disqualification notices.

OTHER STUFFDuty to Report Fraud, Waste, Abuse, and

Ethics Violations

To your supervisor;Ethics Counselor, or

Anonymous Reporting through:– DoD Inspector General Hotline, (800) 424-9098 – U.S. Office of Special Counsel, (202) 254-3640,

www.OSC.gov62

http://www.osc.gov/

ConclusionCongratulations!

Your 2013 Annual Ethics Training is Complete. Thank You for Your Compliance with U.S. Government Ethics Requirements

To Receive Credit for this Training, you must click the “Complete & Send Certificate” Button Below

Note: By submitting you are certifying that you personally completed the entire training module.

Once you click on the button below, the certificate will open in your browser. Please close this presentation to view and complete the certificate.

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Complete & Send Certificate

http://www.dhra.mil/webfiles/docs/Ethics_pdfs/2013_Ethics_Training_Cert.pdf